MANAGERIAL PERSPECTIVE REGARDING SIGNALING EFFECTS OF DIVIDEND POLICY: A CASE STUDY OF PAKISTAN STOCK EXCHANGE

Abstract

The present study was conducted to evaluate the managerial perception for the signaling effect of
dividend payout. Research study was conducted in non financial firms of Pakistan Stock Exchange. A
sample of 217 was estimated which were used for the data collection with the help of questionnaire.
Study has used mixed methodology approach to get more accurate and precise findings about the
signaling effect of dividend payout in Pakistan Stock Exchange. Study has used interview schedule
from qualitative and closed ended questionnaire from quantitative methods after evaluating the
previous studies conducted in the different parts of the world. Regression model was used for the
answer of research questions posted. The results of regression model states that Current earnings,
past dividend, liquidity, taxation, managerial perception, and investor perception and share prices
have significant effects on the dividend payout. The findings of interview schedule show that the
investors are always interested in getting dividend all the time but to avoid the taxes, they prefer
capital gain. It also concluded that previous dividend ratio cannot or sometimes it has minimal role in
the estimation of dividend ratio for the present year. Consistent payment of dividend can be taken as
the best managerial performance and will transmit a 'good signal' to the market.